Citi maintains Buy on Immunovant stock with $58 target

On Thursday, Citi reiterated its Buy rating on Immunovant (NASDAQ:IMVT) shares, maintaining a price target of $58.00, significantly above the current trading price of $18.88. According to InvestingPro data, analyst targets range from $20 to $58, with a strong consensus recommendation of 1.47 (where 1 is a Strong Buy). The affirmation follows the release of Immunovant’s topline data for the treatment of myasthenia gravis (gMG) on Wednesday.

The Citi analyst acknowledged investor concerns regarding the high placebo response rate in the gMG study, which some suggest could be attributed to expectation bias. However, the analyst pointed out that despite these concerns, the data showed meaningful responses on stringent metrics and a clear dose response for batoclimab, Immunovant’s lead product candidate. The company’s strong financial position, with InvestingPro analysis showing more cash than debt and a healthy current ratio of 6.04, provides runway for continued development.

Investors also voiced apprehension about the potential market competition for IMVT-1402, Immunovant’s FcRN inhibitor, as several similar treatments for gMG might already be established by the time IMVT-1402 could be approved. The analyst concurred with this perspective but emphasized that Immunovant’s long-term value is likely to be found in indications beyond gMG and chronic inflammatory demyelinating polyneuropathy (CIDP).

The analysis by Citi suggests that while competition in the gMG space is a valid concern, the deeper responses demonstrated by batoclimab on more stringent metrics and the dose-dependent response are positive signs for Immunovant’s drug. These factors, along with the potential for Immunovant to focus on other indications, contribute to the firm’s continued support for the stock at the current price target.

Immunovant is focused on developing treatments for autoimmune diseases, and the recent data release marks a critical step in the progression of their lead asset, batoclimab. While the company is not currently profitable, with analysts expecting a net income decline this year, its strong balance sheet positions it well for future development. The company’s stock price and investor sentiment will likely continue to be influenced by further developments in their clinical trials and the strategic decisions made regarding their product pipeline. For deeper insights into Immunovant’s financial health and growth prospects, including 8 additional exclusive ProTips, check out the comprehensive research report available on InvestingPro.

In other recent news, Immunovant has reported positive results from its clinical studies on batoclimab for Myasthenia Gravis (MG) and Chronic Inflammatory Demyelinating Polyneuropathy (CIDP). Despite the successful outcomes, the company does not plan to seek regulatory approval for these indications yet, as it focuses on advancing its next-generation drug, IMVT-1402. Additionally, Jefferies initiated coverage of Immunovant with a Hold rating and a $20 price target, citing the potential for significant long-term value but advising caution in the short term. Piper Sandler maintained an Overweight rating, setting a $57 price target, and highlighted a potential buying opportunity due to the valuation gap compared to competitors. Guggenheim adjusted its price target to $44, maintaining a Buy rating, while expressing optimism about the efficacy of batoclimab and the potential of IMVT-1402. H.C. Wainwright also reaffirmed a Buy rating with a $51 price target, focusing on upcoming clinical trial results for batoclimab. These developments reflect a mix of strategic shifts and analyst perspectives on Immunovant’s future prospects.

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